🏙️ PCE Inflation: Markets’ Fate Hangs In The Balance?

Good Morning!

Asian markets tremble as Trump's aggressive tariff threats send shockwaves through global financial landscapes. Asian stocks nosedive after Trump's bombshell: 25% tariffs on Mexico and Canada, plus 10% on Chinese goods. Nikkei plummets 0.9%, auto stocks crushed. Currencies wobble, investors brace for potential economic turbulence. Yen strengthens, Bitcoin hovers around $92k. Oil slips further as market contemplates Middle East ceasefire impact.

In today’s email:

• PCE: Fed’s favourite inflation metric out today

• Bitcoin: Could see a move lower to $88k

• CFTC: Future crypto regulator? Goodbye SEC? 

• Gold: Central Bank stockpiling continues

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THE BIG IDEA

U.S. stock futures steadied Tuesday evening following a positive session on Wall Street

Driven by gains in technology stocks that helped offset concerns over potential new tariffs under President-elect Donald Trump. Trump’s latest threats to impose tariffs on China, Canada, and Mexico added uncertainty to the market, but tech resilience buoyed sentiment.

S&P 500 Futures edged up 0.1% to 6,041.50 points, while Nasdaq 100 Futures held steady at 20,989.25. Dow Jones Futures also rose 0.1% to 44,986.0. With the Thanksgiving holiday approaching, trading volumes are expected to remain light.

Investors are now focused on the October Personal Consumption Expenditures (PCE) price index data, set to release today. As the Federal Reserve’s preferred inflation gauge, the report will be pivotal in shaping expectations for further interest rate cuts. Core PCE, which excludes food and energy prices, is anticipated to show steady growth, remaining above the Fed’s 2% target.

Recent inflationary pressures have raised questions about the likelihood of a 25-basis-point rate cut in December

These doubts were echoed in the minutes of the Fed’s November meeting, which revealed divisions among policymakers about the pace and extent of future rate easing.

On Wall Street, the Nasdaq rose, driven by strong performances in technology. Amazon.com jumped over 3% after reports of its plan to develop custom AI chips, reducing dependence on NVIDIA. The Dow rose 0.3%, while the NASDAQ Composite climbed 0.6%.

However, after-hours trading saw notable declines in HP Inc. (-7.2%) and Dell (-10%), following disappointing guidance and revenue misses. Workday and Autodesk also fell sharply after weaker-than-expected outlooks, reflecting lingering challenges in specific sectors despite broader market gains.

MARKETS AT A GLANCE

TOP NEWS

The EU readies its economic armor as Trump's tariff threats loom, signaling potential transatlantic trade turbulence

Trump's latest economic salvo targets Canada, Mexico, and potentially Europe, weaponizing tariffs beyond traditional trade boundaries. The EU's counter? A freshly minted economic defense toolkit, designed to push back against potential coercive measures. Markets are jittery, investors cautious. Buckle up for a geopolitical chess match.

Chinese companies strategically slash foreign-currency debt, creating a financial firewall against potential Trump-era economic pressures

Chinese firms are playing defensive economics, cutting foreign-currency debt to a 12-year low of $570 billion. With yuan facing depreciation risks, they're battening down the financial hatches before Trump's potential trade storm hits. Smart move or economic panic?

Wall Street discovers sports franchises as a golden investment opportunity, with leagues outperforming S&P 500 by up to five times

Game on, investors! Sports aren't just about touchdowns and slam dunks anymore—they're the hottest investment ticket in town. Major League Soccer's valuation rocketed 1,565% while traditional markets yawned. Private equity's playing a strategic game, snagging minority stakes and betting big on media rights, stadiums, and emerging leagues. Diversification just got way more exciting!

CRYPTO

Bitcoin May Dip to $88,000 Before Breaking $100,000: Glassnode Report

Bitcoin's sharp rally has left an "air gap" between $76,000 and $88,000, suggesting a potential dip to this range before attempting $100,000, according to Glassnode. Long-term holders have distributed 507,000 BTC, realizing record profits of $2.02 billion daily. While sell-side risks rise, resilient demand and re-accumulation could stabilize the market for a renewed push toward higher levels.

Bitcoin Dips 2% After Jim Cramer Endorses Crypto in Portfolios

Bitcoin slid to $92,700 following Jim Cramer’s suggestion that cryptocurrencies like Bitcoin and Ethereum deserve a portfolio spot amid rising U.S. debt concerns. Known for the "inverse Cramer" meme, many skeptics joked his endorsement marked a potential market top. Cramer admitted still owning crypto, citing it as a hedge, but his calls continue to spark debate.

Tornado Cash Sanctions Overturned, TORN Surges Over 500%

A U.S. appeals court ruled Treasury sanctions on Tornado Cash unlawful, stating its smart contracts aren't "property" of any entity. The decision marks a major privacy win, as Coinbase-backed advocates argued against the sanctions. TORN, Tornado Cash's token, skyrocketed over 500%, reflecting renewed market confidence in the privacy-protecting protocol.

Trump Administration Eyes Shifting Crypto Oversight to CFTC

President-elect Trump’s team may empower the Commodity Futures Trading Commission (CFTC) to regulate crypto exchanges and spot markets for assets like Bitcoin and Ether, reducing the SEC’s influence. This aligns with Trump’s pro-crypto agenda, including a federal Bitcoin reserve and new White House crypto roles, as outgoing SEC Chair Gary Gensler steps down on Trump’s inauguration day.

GOLD

China's Central Bank Quietly Adds 60 Tonnes of Gold

The People's Bank of China covertly purchased 60 tonnes of gold in September, driving 2024’s gold price surge by 30%. Using London Bullion Market exports, analysts reveal these acquisitions align with geopolitical and economic tensions. This secret buying complements Western ETF inflows, intensifying global gold demand. Analysts predict sustained upward pressure on gold prices amid persistent geopolitical and fiscal uncertainties.

DAILY ECONOMIC CALENDAR (ET)

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